PSUs to seek approval from Niti Aayog for joint ventures

It is to ensure that the deployment of public funds in such joint ventures and subsidiaries is made after due scrutiny and adequate justification

GN Bureau | October 15, 2016


#Niti Aayog   #PSUs   #joint ventures   #Arun Jaitley   #department of public enterprises  

 The NITI Aayog, besides identifying PSUs for strategic sales and monitoring the closure of loss making firms, will now also give approvals to the state-run entities to set up financial joint ventures, a power which rested with company boards.

According to a news report published in the Business Line, the department of public enterprises (DPE), which essentially monitors the functioning of state-owned entities, has recently come out with guidelines asking the PSUs to seek ‘concurrence’ from NITI Aayog for such joint ventures.
 
It said that the aim to ensure that the deployment of public funds in such joint ventures and subsidiaries is made after “due scrutiny and adequate justification”.
 
Earlier, the boards took a call on technology joint ventures and strategic alliance. Only in certain cases nod from the administrative ministry was sought.
 
The DPE has said that once such proposals are cleared by the boards, administrative ministries must also seek the approval of the NITI Aayog, to check the “proliferation of financial joint ventures and wholly owned subsidiaries” by Maharatna, Navratna and Miniratna PSUs. Although DPE continues to be the nodal authority for all PSUs, in some instances like this, the NITI Aayog has been brought in as an additional layer of oversight, the report added.
 
Earlier, in the budget 2016-17, finance minister Arun Jaitley had entrusted the responsibility to identify PSUs for strategic sale to the NITI Aayog, which has already submitted a two-part report on the issue and is working on the other report.
The NITI Aayog is a think tank to the government for providing policy inputs as well as designing strategic and long-term programmes for the centre and the states.
 

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